LATEST THINKING

Effective IT/OT integration for distribution utilities

Integration of data and operations is critical for business benefits and greater performance.

The need to transform distribution operating and business models

Distribution utility businesses must rethink and transform their business and operating models to address issues of cost, reliability and network access. To respond to this increasingly complex future, distribution utilities will need to evolve their
business and operating models toward becoming a distribution platform optimizer. Driving effective IT/OT integration will be critical to enable data and operations to seamless work together to achieve business outcomes and greater future performance.

Distribution utilities identify a number of priority capability areas that IT/OT integration would greatly support. While these areas cover a broad range of key business issues, from network modeling and crew management to business intelligence and electric
vehicle load optimization, there are three main high-priority areas:

Outage management

For most utilities, the current process to respond to an outage and restore power is a critical driver of cost. It requires a number of sequential processes, “handshakes” and “hand-offs” between control rooms, dispatchers and maintenance
crews. Enhancing situational awareness across that chain could help utilities make considerable savings. More sophisticated data can even identify and analyze optimal crew deployment to avoid excessive overtime payments.

From an IT/OT integration perspective, the outage management system is an ideal illustration of the potential value of increasing data integration and remote control. For example, smart metering can provide near-real-time monitoring of outage status,
allowing improved fault identification, particularly for outages on long radial lines in remote areas and nested network failures in suburban and urban areas.

Utilities can also significantly improve the management of unplanned outages by more effective automation and planning possible by integrating data from multiple sources. Advanced switching capabilities in the medium-voltage network could enable utilities
to optimize the customer experience, helping minimize or eliminate downtime for as many customers as possible. In addition, utilities’ revenues could receive a boost, as aggregate consumption will rise as more effective, accurate planning
means fewer customers are disconnected.

Advanced asset management

Advanced asset management is a clear priority capability area that utilities are targeting for improvement from IT/OT integration. Aging assets, reinforcement requirements from distributed generation deployment and constraints on accessing assets are
increasing the need to improve asset life-cycle management. Additionally, moves toward incentive-based regulation is escalating the need for managers to deliver more effective use of their asset portfolios.

Currently, asset management is largely characterized by limited, often poor-quality, historical data, and decisions are based on statistical models that may not accurately reflect the true condition and performance of assets in the grid. With more accurate,
real-time data flows from the smart grid would enable utilities to make more informed, timely asset decisions.

Accurate data flows from assets can also enable distribution companies to take account of their operating environment’s unique conditions in order to make decisions that reflect their real-world context.

Monitoring asset health and performance in real time could enable utilities to make more effective engineering decisions, as well as plan and allocate capital expenditure more accurately and effectively. That capability will become increasingly
important as regulatory funding becomes more incentive- and performance-based.

Integrating distributed generation through monitoring and control

The growth of distributed generation (DG) is raising big challenges and costs for distribution companies that need to reinforce the network in order to manage these new forms of supply. While many networks can manage small to moderate quantities of DG
with limited negative impacts, there is a tipping point where utilities need new approaches.

Smart approaches to DG integration require the availability and analysis of considerable flows of data which are not readily available today. Many distribution utilities, for example, have little or no visibility into prosumer systems across the
grid and have to estimate the size and timing of DG exports to the grid. Yet, utilities expect to see grid faults increase from the growth in distributed generation technologies over the next several years.

The integration of IT/OT data will be essential for distribution companies to steer the development of DG to optimize grid performance and incorporate the scale, speed and complexity of new forms of generation.

We see three progressive phases or levels of IT/OT integration that will enabled utilities to manage the impact of DG more effectively. They range from basic incorporating of DG output data into network planning to the most sophisticated scenario in which
grid operators are empowered with technology, such as smart inverters, that allow them to control services from DG beyond curtailment and create a more flexible, responsive grid.

The momentum behind the requirement for IT/OT integration is considerable. Pressing challenges and opportunities facing distribution utilities hinge on the ability to successfully combine data and services from previously distinct domains. Distribution
utilities need to grasp the implications for their organization, systems and skills as a priority. Our research highlights that utility executives are keenly aware of the significance of getting IT/OT integration right and moving ahead decisively.

IT/OT BENEFITS

According to Accenture's Digitally Enabled Grid IT/OT survey, there are three main high-level benefit areas that utilities executives expect to see from IT/OT integration. It is clear executives expect IT/OT
integration to support the core business capabilities, making better use of internal and external data
sources to improve decision making and provide better service levels.

Core business areas?

% of utility executives who believe these areas will benefit the most from IT/OT integration

RECOMMENDATIONS

For distribution utilities, IT/OT integration is a necessity, not a choice. Integration holds the potential to
produce considerable business benefits, however, achieving these benefits will require overcoming a
number of barriers: developing a new approach, dealing with complexity, and regulatory and cybersecurity challenges.